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Canadian Bankruptcy or Proposal if you Live Abroad

Canadians living abroad can go into bankruptcy or file a proposal for their Canadian debt in the following ways:

  • They can go bankrupt in their country of residence.  This will free them of the Canadian debt so long as they live in that foreign country.  If they return to Canada that debt will have survived and  they will still owe that money.
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  • They can re-establish residency in Canada and then go bankrupt or file a proposal in Canada.
  • They can go bankrupt or file a proposal under Canadian law while still living in that foreign country if:
    • They have property in Canada (re: definition of "insolvent person")  "Property" includes money, goods, things in action, land and every description of property, whether real or personal, legal or equitable; 
    • or if they have carried on business in Canada in the preceding year (re: definition of "insolvent person" and definition of "locality of a debtor").

Note: 

If you think you qualify to go bankrupt or file a proposal while living in that foreign country the next step would be to fill out an information form and then contact a trustee, where you used to live in Canada:

The trustee will have to get permission from the Office of the Superintendent of Bankruptcy for the debtor to go bankrupt or file a proposal in that foreign country without the person coming back to Canada.

 

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